News in Review

UK house prices fell by 0.6% in April following a rush in March to beat Stamp Duty changes. Despite the drop, prices remain 3.4% higher than a year ago US GDP shrank by 0.3% in Q1 2025—its first contraction in three years—due to reduced government spending and a surge in imports ahead of tariffs Ukraine and the US have signed a new deal to share energy and mineral profits and establish a reconstruction investment fund, aiming to boost Ukraine’s recovery 

“Activity is likely to pick up steadily as summer progresses” 

UK house prices fell by 0.6% in April, according to new data from Nationwide, marking the first monthly decline since August 2024. This dip follows a surge in transactions during March, as buyers rushed to complete purchases ahead of Stamp Duty changes introduced on 1 April. While the slowdown was anticipated, annual house price growth remains positive, with homes still 3.4% more expensive than a year ago and the average property price now standing at £270,752. 

Nationwide’s index fell from 542.4 in March to 539.3 in April, reinforcing the short-term impact of fiscal policy on buyer behaviour. Looking ahead, market activity is expected to gradually improve. 

Nationwide’s Chief Economist, Robert Gardner, explained that the market softness is typical following changes to Stamp Duty, with many buyers bringing forward purchases to avoid higher charges. Looking ahead to the summer months he said, “Activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.” 

The latest Money and Credit statistics from the Bank of England (BoE) released last week show net residential mortgage borrowing increased significantly by £9.7bn to £13.0bn in March. Gross lending also saw a sharp uptick to £39.9bn in the month, from £24.9bn in February, and was the highest in almost four years (since June 2021).  

On 8 May the main focus will be on the BoE announcement, where the Monetary Policy Committee is expected to vote to lower interest rates by a quarter point. Economists polled by Reuters expect quarter-point rate cuts every three months throughout the year – taking interest rates to 3.75% by the end of 2025. 

US economy dips in Q1 

The US economy shrank at an annual rate of 0.3% in Q1, marking the first quarterly contraction in three years. The contraction followed growth of 2.4% in the previous quarter (Q4 2024) and was largely attributed to falling government spending and a sharp rise in imports, as businesses rushed to bring goods into the country ahead of tariffs. While imports count negatively toward GDP, economists noted that such swings are not necessarily indicative of a broader economic downturn and may be reversed in subsequent quarters. 

President Trump responded to the data by deflecting blame, saying, “This is Biden” and reiterating his belief that tariffs would ultimately lead to stronger domestic investment. The White House called the GDP figure a ‘backward-looking indicator,’ insisting the fundamentals remain strong. “The underlying numbers tell the real story of the strong momentum President Trump is delivering,” said Press Secretary Karoline Leavitt. 

Ukraine / US deal struck 

Last week, after months of negotiations, Ukraine signed a deal with the US to share future profits from its energy and mineral reserves, aiming to support the region’s economic recovery and incentivise continued US investment in defence and reconstruction. The agreement also established a new US-Ukraine Reconstruction Investment Fund, recognising America’s aid since Russia’s invasion. US Treasury Secretary Scott Bessent said the deal reflects a joint commitment to peace, growth and rebuilding. 

Support pledged for UK businesses 

Chancellor Rachel Reeves has pledged stronger support for UK businesses by addressing unfair trade practices, such as the import of cheap goods which undercut domestic producers. Measures include empowering the Trade Remedies Authority (TRA) and reviewing customs rules on low value imports. Retailers argue this loophole allows foreign competitors to unfairly underprice UK businesses.  

William Bain of the British Chambers of Commerce (BCC) welcomed the move, saying, “There are still many twists and turns to go in the trade war between the US and China. It remains to be seen whether cheap Chinese goods will flood the UK as a result, but the risk is present. It is sensible for the TRA to have all the necessary tools and resources to take action to prevent the UK being swamped with unfairly cheap products.” 

He continued, “If domestic production suffers from a surge in imports or dumping of goods it is right that business has clearer access to make their case to the TRA. It must have the resources it needs to enforce a level playing field.” 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

             All details are correct at time of writing (7 May 2025) 

Positioning portfolios in a protectionist world

US Vice President JD Vance spelled it out in Munich – “there is a new sheriff in town” – and that sheriff’s policies are already having far-reaching consequences. While dealing with geopolitical uncertainties is clearly nothing new for long-term investors, Trump’s re-election has once again vividly highlighted the need for a sound investment approach based on careful planning and positioning of assets. 

Global growth has stabilised 

In its latest assessment of world economic prospects, the World Bank highlighted several positive developments in the global outlook. Specifically, it noted that global growth stabilised at 2.7% in 2024, after a series of negative shocks, and that this rate of expansion is expected to hold steady across 2025 and 2026. It also emphasised that, with appropriate policy interventions, current global challenges could be transformed into opportunities, fostering a more resilient world economy. 

Policy uncertainties 

The World Bank did, however, warn that heightened uncertainty and adverse trade policy shifts represent key risks to global trade and economic growth prospects. Protectionism is back and could lead to shifts in global economic structures, including changes in trade alliances and manufacturing bases, while the increased costs of imported goods due to tariffs could have inflationary consequences. 

A permanent fixture 

Another aspect of Trump’s new tariff push is that it seems to represent a long-term policy shift with multiple objectives. It has a national security aspect, for instance, aiming to address immigration and drug-smuggling concerns; it has an economic leverage element designed to deal with trade imbalances, and is also viewed as a potential revenue generator to fund tax cuts. In essence, the trend to protectionism appears set to become the new norm, necessitating a need for strategic investment approaches in a shifting landscape. 

Take control 

Experienced investors know the importance of staying calm during periods of market uncertainty and the need to continue basing investment decisions on sound financial planning principles. And, right now, the adoption of appropriate diversification and risk management strategies undoubtedly offer investors the safest route through any volatility in an increasingly protectionist world. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

Money – In the news

Child Trust Funds still unclaimed 

Some 728,000 people who have recently turned 18 have not claimed their Child Trust Fund, figures1 show, with the total value of unclaimed money amounting to £1.4bn. Many eligible young people do not know that their account exists, campaigners say. MPs are urging more action from HMRC to inform potential recipients. 

Youth still trust ‘finfluencers’ 

Social media remains the most popular place for those under 30 to find information about money, research2 shows, with six in 10 young people following one or more financial influencer (‘finfluencer’) online. Even more strikingly: almost eight in 10 young people say they trust everything finfluencers say. The Financial Conduct Authority (FCA) has launched targeted action against finfluencers who may be touting financial services products illegally, as increasing numbers of young people are falling victim to scams. Steve Smart, Joint Executive Director of Enforcement and Market Oversight at the FCA, commented, “Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt. Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk.” 

Pension priority for young workers 

Workers aged 18 to 34 are contributing almost 10% of their wage to a pension each month, a report3 suggests. On the other hand, many older workers are now regretting that they will have to live a more frugal lifestyle than hoped, the report reveals. Don’t have regrets, prioritise your pension now. 

1The Share Foundation, 2024, 2MRM, 2025, 3Royal London, 2024 

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The value of your investments (and any income from them) can go down as well as up.

Economic Review April 2025

The UK economy grew 0.5% in February, driven by strong service and manufacturing sectors despite looming headwinds Inflation dipped to 2.6% in March, but April’s household bill hikes are expected to reverse the trend The labour market weakened as vacancies fell, though wage growth remained robust amid cost pressures and job cuts 

UK economy returns to growth 

Data released last month by the Office for National Statistics (ONS) showed economic growth was stronger than expected in February, although more recent survey evidence suggests this pick-up may prove short-lived as economic headwinds threaten growth prospects. 

According to the latest gross domestic product (GDP) statistics, economic output rose by 0.5% in February, the fastest rate of expansion in 11 months. This figure was higher than all forecasts submitted to a Reuters poll of economists, which had pointed to a monthly rise of just 0.1%. 

ONS said this stronger-than-expected performance partly reflected robust service sector growth, with computer programming, telecoms and car dealerships all performing well during February. In addition, ONS noted that manufacturing, electronics and pharmaceutical businesses all enjoyed a strong month.  

Separately released trade figures for February also showed goods exports to the US hit their highest monthly level since November 2022. Analysts suggested the jump was a clear sign of firms trying to beat the imposition of President Trump’s tariffs. 

Survey data, however, shows that those tariffs are now having a detrimental impact on business activity. Last month’s preliminary headline growth indicator from the closely monitored S&P Global/CIPS UK Purchasing Managers’ Index (PMI), for instance, fell to a 29-month low of 48.2 in April, down from 51.5 in March. This left the index significantly below the 50.0 threshold, denoting a contraction in private sector output. 

S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “The disappointing survey reflects the impact of headwinds from both home and abroad. The biggest concern lies in a slump in exports amid weakened global demand and rising global trade worries, but higher staffing costs have also piled pressure on companies – linked to the National Insurance and minimum wage changes that came into effect at the start of April.”  

Inflation rate eases before expected jump 

Although last month’s inflation data showed the headline rate at its lowest level for three months, this dip is only expected to prove temporary with an acceleration in price growth likely to resume when April’s data is published later this month.  

The latest ONS statistics revealed the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – fell to 2.6% in March from 2.8% the previous month. This reading was just below analysts’ expectations, with a Reuters poll pointing to a rate of 2.7%. 

ONS noted that March’s decline was largely driven by falling petrol prices and a drop in prices for computer games. The one significant offsetting factor came from the clothing sector, with the price of clothes rising strongly following February’s surprise, unseasonal fall. 

Despite this second monthly CPI decline, economists still expect to see a pick-up in inflationary pressures when April’s data is released on 21 May. This predicted jump will largely be driven by a host of household bill increases, which came into effect at the start of last month, as well as price pressures on businesses as they respond to the National Insurance and minimum wage hikes. 

Forecasting the future path of inflation, however, has become more complicated with the introduction of Trump’s tariffs. Bank of England (BoE) policymaker Megan Greene recently suggested the tariffs would probably lead to lower rather than higher inflation in the UK, although she did stress big uncertainties still surround the tariff plan, adding “none of us have any idea what they’ll look like when the dust finally settles.” 

While such uncertainties undoubtedly create a policy dilemma for the BoE, its interest-rate setting committee is widely expected to sanction another quarter-point rate cut this month, with its decision due to be announced on 8 May. 

Markets  

As April drew to a close, global markets were digesting fresh data from the States which showed that the economy contracted for the first time in three years during Q1.  

The US economy shrank at an annualised rate of 0.3%, as government spending fell and imports surged, with firms racing to get goods into the country ahead of tariffs. The contraction follows robust growth of 2.4% recorded in Q4 2024. The Dow Jones closed the month down 3.17% on 40,669.36, while the tech-orientated NASDAQ closed April up 0.85% on 17,446.34.  

On the continent, the Euro Stoxx 50 closed the month 1.74% lower on 5,156.90. In Japan, the Nikkei 225 ended April on 36,045.38, a monthly gain of 1.20%. In the UK, the blue-chip FTSE 100 index closed April on 8,462.77, a loss of 1.40%. The mid-cap focused FTSE 250 closed the month up 1.82% on 19,830.00, while the FTSE AIM closed on 689.93, a gain of 1.16%.  

On the foreign exchanges, the euro closed the month at €1.17 against sterling. The US dollar closed at $1.33 against sterling and at $1.13 against the euro.  

Gold closed April trading around $3,317 a troy ounce, a monthly gain of over 5%. The price has pulled back from recent all-time highs as geopolitical tensions eased slightly as a result of Trump’s tariff relief orders. Brent Crude closed the month trading at around $61 a barrel, a monthly loss of over 18.00%. The oil price fell at month end as demand concerns weighed. 

Retail sales see strong quarterly rise 

Official retail sales statistics published last month revealed that sales volumes grew at their fastest rate in nearly four years across the first three months of 2025. 

According to the latest monthly ONS figures, retail sales volumes rose by 0.4% in March, defying economists’ expectations of a 0.4% decline. ONS said sales at garden centres were boosted by March’s sunny weather, while demand for clothing and DIY goods also proved to be strong. This left sales across the first quarter as a whole up by 1.6%, the largest three-month growth rate since July 2021. 

Data from GfK’s most recent consumer confidence survey, however, suggests sales may not grow so quickly over the coming months. In April, the closely watched gauge of British consumer sentiment fell to its lowest level since late 2023, with GfK saying rising household bills and turbulent global financial markets were behind the drop in confidence. 

The latest CBI Distributive Trades Survey found that retailers are also relatively pessimistic about the future outlook. Although the survey’s monthly sales gauge for April was actually higher than the comparable figure for March, respondents said they expect the retail environment to worsen this month reflecting concerns about weak consumer sentiment and global economic uncertainty. 

Jobs market continues to weaken 

The latest set of UK labour market statistics showed that demand for workers continued to wane in the run-up to April’s National Insurance and minimum wage changes, although pay growth once again remained strong. 

Figures published last month by ONS revealed another decline in the overall number of job vacancies. In total, there were 26,000 fewer vacancies reported between January and March 2025, leaving the estimated number of jobs on offer at 781,000. This leaves vacancies 15,000 lower than in the same period in 2020, marking the first time since March to May 2021 that the total has fallen below its pre-pandemic level.  

Survey evidence also points to a further softening in demand for labour. Data from April’s S&P Global/CIPS PMI, for example, found job cutting remains ‘aggressive’ across the UK private sector as firms grapple with the twin pressures of decreased workloads and rising payroll costs; survey respondents widely noted that squeezed margins had resulted in the non-replacement of voluntary leavers. 

The ONS data, however, did show that wage growth remains strong. Indeed, average weekly earnings excluding bonuses rose at an annual rate of 5.9% in the three months to February, up from 5.8% in the previous three-month period. 

All details are correct at the time of writing (01 May 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

News in Review

The IMF has downgraded global growth forecasts, warning of heightened risks from US tariffs and policy uncertainty Manufacturing output figures show stagnation, with firms citing declining demand, rising costs, and global uncertainty UK consumer confidence has hit its lowest since November 2023 due to cost-of-living pressures and tariff fears 

“Uncertainty is bad for business” 

As policymakers gathered in Washington for the International Monetary Fund (IMF) and World Bank spring meetings, IMF Managing Director Kristalina Georgieva urged countries to act “swiftly” to resolve trade tensions jeopardising global growth. “Uncertainty is bad for business,” Georgieva warned, with tariffs causing companies to delay investment and consumers to curb spending.  

The IMF highlighted the risk to global trade from President Trump’s tariffs, warning modern supply chains are highly interconnected. In its April 2025 World Economic Outlook, the IMF downgraded its global growth forecast, citing US tariffs and growing uncertainty. It now sees a 40% chance of a US recession, up from 25% and expects US growth of just 1.8% this year, down from 2.7% in January. It also warned, ‘Ratcheting up a trade war and heightened trade policy uncertainty may further hinder both short-term and long-term growth prospects. Scaling back international cooperation could jeopardise progress toward a more resilient global economy.’ 

The IMF now forecasts UK growth at 1.1%, ahead of Germany, France and Italy, though the UK is also expected to have the highest inflation among developed economies at 3.1%, due to rising energy and water bills. Despite this, the IMF thinks the Bank of England could cut interest rates three more times this year. Chancellor Rachel Reeves said the government was working “flat out” to secure a trade deal with the US. “We’re all grappling with this issue of tariffs but I think there is an understanding why President Trump wants to address some of the global imbalances there are in the system,” she said. 

Challenging environment for manufacturers 

UK manufacturing output was broadly flat in the four months to April, according to the latest CBI Industrial Trends Survey from the Confederation of British Industry (CBI). Although several sectors reported weaker performance, higher production in motor vehicles and transport helped offset the decline. However, manufacturers expect output to dip slightly by July. 

New domestic and export orders fell in Q1 and could decline further in the months ahead. Manufacturers remain concerned about rising costs, falling new orders and heightened uncertainty around global economic conditions. Export expectations are particularly weak, with half of firms citing political or economic uncertainty abroad, the highest since April 2021. Cost pressures have intensified, with average costs rising faster than earlier in the year. Domestic prices are expected to continue rising, though export prices may remain stable. 

The sector’s overall sentiment worsened in April and investment plans remain subdued. Firms expect to cut spending on buildings, machinery, innovation and training, blaming weak demand, poor returns and labour shortages. Employment is also under pressure – manufacturing headcount dropped at the fastest pace since October 2020. 

CBI Chief Economist Ben Jones commented, “The uncertainty around global economic conditions only increases the importance of getting it right in domestic economic policy. Firms are already feeling the cumulative burden of rises in National Insurance contributions and the National Living Wage – and tariffs represent another headwind for the business sector.”  

Consumer confidence slumps  

UK consumers have suffered an ‘extraordinarily unsettling’ April, according to GfK’s Consumer Confidence Barometer. The overall index score, which includes five different measures of consumer confidence, slipped to its lowest since November 2023, falling four points to -23, erasing this year’s gains. GfK said UK households were hit by ‘multiple April cost increases’ including higher energy, water and telecoms bills, as well as Stamp Duty and Council Tax. Concerns over US tariffs and the return of higher inflation also filtered through to consumers. Business sentiment has weakened as well, with private sector activity falling at the fastest rate in over two years, according to S&P Global. 

Stamp Duty deadline drives ‘blockbuster’ month  

Barclays reported mortgage completions increased by 50% in March, as buyers rushed to secure Stamp Duty savings before the temporary cut was phased out. March was the UK property market’s busiest month since September 2021, when activity was driven by pandemic-era low interest rates. The number of completions was up by 70% among first-time buyers, but Barclays said the high level of activity didn’t suggest broader confidence in the UK housing market. Its survey revealed just 16% of renters thought buying a property was achievable in the next five years. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

             All details are correct at time of writing (30 April 2025) 

Investment megatrends for 2025 and beyond

Megatrends are powerful, long-term shifts, which are already changing the way we live and work Today, trends such as AI, defence spending, changing energy supplies and demographics, are evident While markets fluctuate daily, megatrends are shaping the future, creating exciting opportunities 

Investing megatrends are powerful, long-term shifts expected to reshape industries, economies and investment markets on a global scale. These aren’t just passing trends, they’re already changing the way we live and work, influencing how businesses operate and where investors put their money. 

Geopolitical conflict 

Global tensions have been rising in recent years, with lengthy conflicts in Europe, the Middle East and East Asia destabilising markets. Governments are ramping up defence spending, driving investment in military technology, missile systems and cybersecurity, especially as threats coming from AI emerge. For investors, global uncertainty presents opportunities as nations prioritise security and military innovation. 

Artificial intelligence 

More than just a trend, AI is driving economic change by automating tasks, reshaping business models and boosting efficiency. Massive investment in data centres, cloud computing and hardware is fuelling its expansion, with companies supporting AI infrastructure poised for strong growth. AI is also transforming industries by analysing vast data, generating insights and accelerating digital change. While concerns over an ‘AI bubble’ have surfaced this year, especially after a new Chinese competitor called DeepSeek made headlines, AI seems unstoppable. 

Demand for energy 

Global energy consumption is surging, driven by economic growth, transport electrification and again, AI. This rising demand is reshaping the energy sector, creating both challenges and investment opportunities. Nuclear energy is making a comeback, with older plants being refurbished and new projects progressing. Meanwhile, offshore oil and gas exploration is reviving, showing that fossil fuels still play a key role. At the same time, renewable energy is thriving, with investments in solar, wind and hydrogen. Energy systems are increasing in sophistication as companies develop smart grids and energy storage solutions. 

Shifting demographics 

People are living longer, which means investors can benefit by focusing on sectors set for the rising demand in medical services, treatments and elderly care. Similarly, businesses catering to older consumers, such as those in travel, wellness and lifestyle industries, are poised to capitalise. At the same time, medical innovation is changing how we live and how long we live. Obesity drugs have reduced diabetes risk by 73% and cardiovascular deaths by 20%, while new cancer treatments and AI-driven drugs are pushing boundaries. 

While markets fluctuate daily, megatrends are shaping the future, creating exciting opportunities along the way. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated 

Residential Property Review – April 2025

Data shows 64% of homeowners underestimate how much their property is worth In Q1 demand across prime London neighbourhoods fell nearly 4% compared to Q4 2024 Net mortgage lending fell to £3.3bn in February, down £0.9bn from January 

Most homeowners underestimate property value by tens of thousands

Zoopla research says most homeowners are in the dark about their property’s true value.

While house prices have held steady in recent years, long-term growth has come as a surprise to many homeowners. Zoopla’s data shows 64% of homeowners underestimate how much their property is worth. Over a third valued their home at least £100,000 too low, while nearly one in five missed the mark by £250,000 or more.

Undervaluing their biggest financial asset is especially common for homeowners in the North East, where 81% reported their property was worth more than expected, followed closely by Scotland and the South West. Many said rising demand in their area or home improvements had driven the increase in value. Owners who’ve held their property for 30 years or more tended to be most in tune with market trends, checking values more regularly.

Prime London property market cools in early 2025

Demand for high-end London homes dipped in Q1 2025, despite the strong finish to last year.

While pockets of the market remain resilient, overall buyer appetite has softened across much of London’s luxury property scene. Figures from estate agent Benham and Reeves show demand across prime London neighbourhoods fell nearly 4% compared to Q4 2024, with just under 16% of homes priced at £2m or more securing a buyer.

Richmond was the most sought-after area, with nearly 39% of homes finding a buyer. Chiswick saw the biggest quarterly boost in activity, while Clapham recorded the steepest decline.

Demand for ‘super-prime’ homes priced at £10m upwards slipped to just 3.1%. Wimbledon led the pack, with a third of properties finding buyers, although this was a sharp drop from the previous quarter. Victoria and Chelsea posted gains of 5.6% and 3.2%, respectively.

Home moving costs climb sharply as Stamp Duty relief ends

Moving costs have risen sharply over the past year, with Stamp Duty changes hiking buyers’ bills.

Estate agency Yopa says the average cost of moving is now £51,826, up nearly 11% in just 12 months. One year ago, the average mover paid around £1,400 in Stamp Duty. That jumped to just over £2,000 earlier this year, but with tax relief thresholds changing on 1 April, the typical bill has now more than tripled to £4,528. Conveyancing fees now average £1,364, up 12.5%, while average mortgage payments have risen 3% to £1,432. Removal costs have edged higher to just under £920. The biggest cost incurred, averaging £43,000, is a deposit.

Yopa’s CEO Verona Frankish said, “Like house prices, [home ownership] costs have increased pretty much across the board and total as much as £52,000 depending on which UK nation you’re looking to make your move within.”

Mortgage borrowing slows despite falls in rates and inflation

Mortgage borrowing dipped in February, as affordability pressures weigh on homebuyers.

The Bank of England’s latest Money and Credit report showed net mortgage lending fell to £3.3bn in February, down £0.9bn from January. Overall lending remained stable, with annual growth in mortgage borrowing at 1.9%.

Gross mortgage lending rose to £24.3bn in February, the highest since November 2022, while repayments also increased to £19.8bn. However, the number of mortgage approvals for house purchases edged down slightly to 65,500, hinting at subdued future borrowing. Approvals for remortgaging with a new lender also slipped to 32,000.

Karim Haji, UK Head of Financial Services at KPMG, said, “The surprising dip in mortgage approvals against a backdrop of lower inflation, interest and mortgage rates and the Stamp Duty increase, suggests that affordability continues to put pressure on household finances.”

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

All details are correct at the time of writing (16 April 2025)

Commercial Property Market Review – April 2025

In central London, twice as many businesses upsized than downsized last year, with one-third of London lettings coming from new entrants Premium pricing, limited development supply and consistent performance makes Edinburgh one of the UK’s most attractive hotel markets According to research, US investors have acquired close to £50bn of UK commercial assets since 2021 

Office market outlook brightens as demand outpaces supply

The UK office market is recovering, with new data pointing to a steady increase in demand.

Rightmove’s Commercial Insights Tracker reported interest in office space rose 11% in Q4 2024 compared to Q4 2023, while supply grew by just 2%. The investment side of the market saw even greater momentum, with demand up 57% against a 1% rise in available stock.

The findings reflect positive industry forecasts for the commercial property market. CBRE confirmed companies that planned to reduce their office footprint have done so and many are actively expanding again. In central London, twice as many businesses upsized than downsized last year, with one-third of London lettings coming from new entrants. Consultancy Hollis predicts a 10% rise in office employment outside London over the next decade, creating demand for an additional 50 million sq. ft of office space across the UK.

Investor appetite for UK healthcare rises amid stable returns and social need

The sector is set for an investment surge, with 93% of investors planning to boost their allocations, according to CBRE.

Most investors polled in CBRE’s Healthcare Sentiment Survey expect transaction volumes to rise in 2025, with specialist and elderly care homes attracting the most capital. Healthcare properties linked to age-related care have shown resilience during economic downturns and offer dependable income over time. Healthcare operators are also upbeat, with 62% planning to expand in the next five years. While rising staff costs and new tax obligations pose challenges, staffing pressures have eased, with vacancy rates at just 4.3%.

While high construction costs and sluggish planning approvals are still widespread concerns, nearly half of developers plan to take on new projects in 2025. Demand is strongest in the North West, with growing interest in Scotland and Northern Ireland.


Scotland stands out as UK hotel investment hotspot

Scotland leads the UK hotel market, with Edinburgh top of Colliers’ 2025 Hotel Market Index.

Edinburgh hotels recorded an 85% occupancy rate last year, alongside a 10% rise in average daily rates and a 13% uplift in revenue per available room. According to Colliers, premium pricing, limited development supply and consistent performance makes Edinburgh one of the UK’s most attractive hotel markets. Glasgow climbed four places in the rankings, and revenue-per-available-room (RevPAR) rose by nearly 9% in 2024, supported by a busy events schedule, corporate travel and relatively low build costs.

Beyond the capital, Inverness is a rising star, with demand fuelled by experiential tourism and access to the Highlands. A 10% rise in RevPAR and limited competition in new development has sparked interest in boutique and luxury offerings. Together, these three cities demonstrate Scotland’s strength as a hotel investment destination.

Retail real estate set for strong year as investment demand rises

London remains the top destination for global capital, with hotels and mixed-use portfolios dominating deal activity. West End offices in particular showed signs of renewed interest. However, the South East continues to attract strong interest, and the North West and West Midlands have been attracting growing volumes of capital, particularly in the build-to-rent, logistics and student accommodation sectors.

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.


All details are correct at the time of writing (16 April 2025)

Your pension and IHT

By Q3, the government is expected to provide implementation guidance on how pensions and death benefits will be treated Any changes are likely to have the greatest impact on people with established estate plans As proposals are not finalised, it’s wise to consider potential implications but await the final guidance before overhauling plans 

Chancellor Rachel Reeves announced plans to include unused pension funds and death benefits within the value of estates for IHT purposes, during the Autumn Budget 2024. Under the proposals, pension administrators will report and pay IHT directly to HMRC. 

Death-in-service benefits paid out by employers have traditionally been separate from personal pensions for the purposes of calculating an IHT bill. By including unused pensions and death-in-service benefits in IHT calculations, more estates could face higher taxes. 

This announcement came as a surprise, particularly to those who have worked hard to build a pension as a tax-efficient way to pass wealth on to loved ones. Any changes are likely to have the greatest impact on people with established estate plans. 

Timeline 

A 12-week technical consultation on the proposed changes concluded on 22 January. Once the feedback has been reviewed, government consultation principles outline that responses should be published within 12 weeks. By the third quarter of the year, the government is expected to provide specific implementation guidance on how pensions and death benefits will be treated under the new regime. Any changes won’t take effect until 6 April 2027. 

As proposals are not finalised, it’s wise to consider potential implications but await the final guidance before overhauling plans. This still gives us ample time to make changes before implementation in 2027. 

A review of existing pension arrangements would be useful so we can think about how the proposed changes could affect what your beneficiaries would receive. 

Time and knowledge 

Rest assured we are monitoring developments and will keep you in touch as we know more. When we have more certainty, we may suggest you consider alternative options that ensure your estate remains as tax efficient as possible and aligned with your goals. Together, we’ll help you secure your family’s future with confidence. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

Stamp Duty changes – tune in

Stamp Duty Land Tax (SDLT) rates reverted on 1 April 2025 to pre-September 2022 levels First-time buyers will have to start paying the tax on any home valued above £300,000 Non-first-time buyers will pay SDLT on properties valued above £125,000.

From 1 April 2025, Stamp Duty Land Tax (SDLT) rates revert to the thresholds prevailing before temporary increases were put in place in September 2022. What will it mean for homebuyers? 

What are the new thresholds? 

Stamp Duty is a government tax paid by house buyers as a lump sum upon completion. It is payable only by buyers purchasing a property or land over a certain price bracket. Currently, existing homebuyers pay no SDLT on properties up to the value of £250,000, while FTBs owe nothing on any purchase below £425,000. 

After reverting to their previous levels, however, FTBs will have to start paying the tax on any home valued above £300,000. Everyone else will return to paying Stamp Duty on properties valued above £125,000. 

First-time buyers bear the brunt  

Whilst this change will impact everyone planning to move, it is arguably FTBs who will be hit hardest. In the heat of the pandemic in 2022, the government announced a temporary change to Stamp Duty to support the housing market and those hoping to get on the housing ladder. 

Now, affordability questions will return along with the lower thresholds. As well as adding thousands of pounds in extra costs for many, others will miss out on first-time buyers’ relief when buying a property up to £500,000. 

Plan, don’t panic 

After the change, fewer than one in 10 buyers will get a Stamp Duty free purchase, compared to a third in the current market, research1 suggests. Analysts also predict fierce competition for properties that fall just below the new thresholds. 

Although the new thresholds add an unwelcome price bump to a house purchase, buyers should not panic. The key is to factor in any SDLT costs into your budget and understand how this affects your affordability. 

1Yopa, 2025 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.